Tax Tables

Any reference to legislation and tax is based on Abacus Wealth Planning Ltd's understanding of United Kingdom law and HM Revenue & Customs practice at the date of production. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.

Income tax rates for individuals

2014/15

2015/16

Bands of taxable income

%

Bands of taxable income

%

(£1 - £2,880)*

10

(£1 - £5,000)*

10

£1 – £31,865

20

£1 – £31,785

20

£31,866 - £150,000

40

£31,786 - £150,000

40

Over £150,000

45

Over £150,000

45

*There is a starting rate of tax of 10% which applies to savings income only. If an individual's taxable non-savings income exceeds £2,880 in 2014/15 or £5,000 in 2015/156 then the 10% starting rate for savings will not apply. Dividend income is taxed at 10% (income up to the basic rate), 32.5% (higher rate). The additional rate for dividend income is 37.5%.

Income tax rates for trusts

Interest in Possession

*Discretionary

2010 - 2014

%

%

Savings income

20

Savings income

2010-13 = 50%2013-15 = 45%

Rental income

20

Rental income

2010-13 = 50% 2013-15 = 45%

Dividend income

10

Dividend income

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2010-13 = 42.5%2013-15 = 37.5%

*The first £1,000 of taxable trust income is charged at 20%, or 10% for dividend income. The £1,000 band is shared between all trusts created by the same settler subject to a minimum of £200 per trust.

Income tax allowances and reliefs

Income Tax allowances and reliefs

Personal allowance

2013/14

2014/15

Born after 5 April 19484*

£9,440

£10,000

Born after 5 April 1938 but before 6 April 1948**

£10,500

£10,500

Born before 6 April 1938**

£10,660

£10,660

Married couple's & civil partners allowance (born before 06/04/1935**), relief given at 10%

£7,915

£8,165

Minimum amount of married couple's allowance

£3,040

£3,140

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*Income limit for personal allowanceAllowance reduced by £1 for every £2 of “adjusted net income” above £100,000 with no personal allowance after £118,800 (2013/14) or £120,000 (2014/15)

£100,000

£100,000

**Age related reliefs reduced by £1 for every £2 of “adjusted net income” over:but never below the basic personal allowance unless “adjusted net income“above £100,000 and never below the basic married couples allowance.

*A rate of 28% is payable by individuals with capital gains in excess of their annual exemption which when added to their income exceed the income tax higher rate threshold (£32,010 for 2013/14 or £31,865 for 2014/15). Where the income and capital gains do not exceed the threshold, the rate of 18% will apply and gains straddling the threshold will pay 18% on the amount of gain below the threshold and 28% above it.

Entrepreneurs' relief was introduced from 06.04.2008 and is available for qualifying business disposals from this date.

Capital gains tax rates for trusts

2013/14

2014/15

Gains

Rate %

Gains

Rate %

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Up to £5,450*

Nil

Up to £5,500*

Nil

Over £5,450

28%**

Over £5,500

28

*The annual exemption is shared between all trusts created by the same settlor, subject to a minimum per trust of £1,090 (2013/14) or £1,100 (2014/15).**Gains arising on bare trusts are not taxable upon the trustees but instead are taxed upon the beneficiary and the new rules for individuals will apply.

Entrepreneurs' relief was introduced from 06.04.2008 and is available for qualifying business disposals from this date.

Registered pension schemes tax charges

Lifetime allowance

Annual allowance

2013/14

£1.5 million

2013/14

£50,000

2014/15

£1.25 million

2014/15

£40,000

A higher lifetime allowance is available to those who have either fixed protection (£1.8 million) or a lifetime allowance enhancement factor (for example, those with primary protection).

Lifetime allowance charge

55% of excess over lifetime allowance if taken as a lump sum.

25% of excess over lifetime allowance if taken in the form of income, which is subsequently taxed under PAYE.

Contributions

Member - unlimited. Tax relief limited to the higher of £3,600 or 100% of relevant UK earnings.

Employer - unlimited. Normally tax relief is claimable, although the employer's local inspector of taxes decides to what extent it will be given.

Annual allowance charge

Unused allowance in respect of the previous three tax years can be carried forward in some circumstances.

A variable tax charge of up to 45% for 2013/14 onwards on the amount of total pension input in excess of the annual allowance.

Unauthorised payments

Charge: 40% income tax charge levied on the recipient of the payment.

Scheme sanction charge: income tax charge on the scheme, normally 15% of the unauthorised payment.

Surcharge: 15% income tax charge payable in addition to the unauthorised payments charge, when the value of unauthorised payment is 25% or more of the fund.

Minimum pension age

55 on or after 06.04.2010

Members with ‘protected retirement ages' - lifetime allowance is reduced by 2.5% for each year below normal pension age, except for members of some public service schemes, including the Police and Armed Forces. No reduction for ill-health early retirement.

Triviality

The triviality limit is set at £30,000 even though the lifetime allowance has reduced to £1.25 million. All pensions including those in payment to be taken into account.

Up-to three pension pots worth less than £10,000 individually can, in some circumstances, be paid as lump sums, regardless of the value of other pension benefits.

Uncrystallised trivial pensions will have 75% of fund subject to tax under PAYE

Trivial pensions already in payment can be commuted (taxed in full under PAYE)

National insurance rates & contributions

Class 1 (Employment) 06.04.2014

Weekly

Yearly

Lower earnings limit (LEL)

£111

£5,772

Upper earnings limit (UEL)

£805

£41,865

Upper Accruals Point (UAP)

£770

£40,040

UAP is the threshold used in the calculation of State Second Pension and contracted out rebates. It replaced the UEL from 06.04.2009

Primary earnings threshold (employees)

£153

£7,956

Secondary earnings threshold (employers)

£153

£7,956

Low Earnings Threshold

£15,100

This is used in the calculation of the State Second Pension. Individuals who earn at least the LEL are deemed to earn the low earnings threshold for State Second Pension purposes

Employee contribution rates 06.04.14

Contracted in (on earnings between primary threshold and UEL)

12%

Reduced rate for married women and widows

5.85%

Contracted out (on earnings between primary threshold and UAP)

10.6%

Contracted out (on earnings between UAP and UEL)

12%

If contracted out via an occupational money purchase scheme, the contracted in rate will be deducted from salary, with the difference between the contracted in and contracted out rate being rebated into the pension.

Additional age-related rebates of 0% - 4.4% of middle band earnings apply to contracted out money purchase schemes. Employer contributions on earnings above the upper earnings limit are assessed at the contracted in rate.

Class 2 (Self-employed) 06.04.2014

Profits between £5,885 and £7,956

£2.75 per week

Class 3 (Voluntary) from 06.04.2014

£13.55 per week

Class 4 (Self-employed, additional levy) 06.04.2014

Profits between £7,955 and £41,865

9%

Profits over £41,865

2%

Inheritance tax rates

Death rate

Lifetime rate

Chargeable transfers 2013/14

Chargeable transfers 2014/15

Nil

Nil

£0 - £325,000

£0 - £325,000

40%*

20%

Over £325,000

Over £325,000

Rates of charge on certain gifts within seven years of death

Years between gift and death

% of death rate charge

0 - 3

100

3 – 4

80

4 – 5

60

5 – 6

40

6 - 7

20

The government has announced that the nil rate band will be frozen at £325,000 until 5 April 2018.

*Reduced to 36% for deaths on or after 6 April 2012 where at least 10% of the net estate is left to charity.

ExemptionsThe following are the main exemptions which are available in certain circumstances:

Gifts to spouses/civil partners (limited to £55,000 if transferor is UK domiciled and spouse* is non-UK domiciled).

Annual allowance of £3,000 per tax year.

Small gifts up to £250 per tax year to individuals.

Normal expenditure out of income.

Gifts in consideration of marriage/civil partnership (£5,000 by a parent, £2,500 by a party to the marriage/civil partnership, or remoter relative, or £1,000 by any other person).

Gifts to UK charities. Not all the above exemptions may be available at the same time.

Corporation tax rates

Rate

Financial Year 2013/14

Financial Year 2014/15

Small companies' rate:£1 - £300,000(This applies to the first £300,000 of profits whether retained or distributed as dividends)

20%

20%

Marginal rate:£300,001 - £1,500,000(This is an effective rate that may only be used if the company does not receive UK dividend payments from other companies)

23.75%

21.25%

Marginal relief factor

3/400

1/400

Main rate: £1,500,001 and over

23%

21%

The main rate of corporation tax is due to reduce to 20% in the financial year beginning 1 April 2015.

Important tax dates

Income Tax:

Payments on account

31 January during the tax year, and 31 July following the end of the tax year. Normally each of these will be *half of the tax due for the previous tax year.

* If you know that your income for the current year will be lower than the previous year's income, you can ask HMRC to reduce your payments on account. However, if HMRC later find that extra tax was due, you will have to pay interest on it. You may also have to pay a penalty if you have asked HMRC to reduce the payments without taking proper care.

Balancing Payment

31 January following the end of the tax year.

Employee P11d

6 July after the end of the tax year

Tax returns

31 October after the end of the tax year for paper tax returns

If the inidividual receives the tax return after 31 July, the deadline is three months following the date of issue of the notice

30 December after the end of the tax year for an online if HMRC to collect tax through tax code (where possible) if the amount of tax owed is less than £2,000.

31 January after the end of the tax year for online returns

Capital Gains Tax:31 January following the end of the tax year in which the gain has arisen.

Corporation Tax:Stand alone companies with taxable profit up to £1.5m - nine months after the end of the accounting period (AP).

Companies with taxable profits over £1.5m# - will pay Corporation Tax in four equal quarterly instalments starting between the 6th and 7th month of the AP and based on estimated liabilities.

#Excludes companies whose profits in the immediately preceding period were less than £1.5m and in the current period less than £10m.

Inheritance Tax:

Death

Normally 6 months after the end of the month in which death occurred.

Lifetime transfer

Normally 12 months after the end of the month in which the transfer is made.

Individual Savings Accounts (ISAs) limits

Maximum contributions 2014/15:

Cash ISA

up to £ 5,940

Stocks and Shares ISAJunior ISA

up to £11,880up to £3,840

Maximum overall subscription is £11,880 to both ISAs.

Transfers from a cash ISA to a stocks and shares ISA are now allowed. It is not possible to transfer from a stocks and shares ISA to a cash ISA

FROM 1st July 2014 - Maximum ISA Limit increases to £15,000 with any combination of Cash or Stocks & Shares up-to the overall £15,000 limit. All ISA's will become NISAs (New Individual Savings Accounts)

Stamp duty land tax (property purchase)

Residential

Non-residential

06.04.12

Value of Consideration

Value of Consideration

Rate

Up to £125,000

up to £150,000

0%

£125,001 - £250,000

£150,001 - £250,000

1%

£250,001 - £500,000

£250,001 - £500,000

3%

£500,001 - £1,000,000Over £1 million to £2 millionOver £2 million from 22 March 2012Over £2 million (purchased by certain persons including corporate bodies) from 21 March 2012

Over £500,000

4%5%7%15%

A nil per cent band applies to residential property transactions in designated disadvantaged areas up to £150,000.

State Benefits 2013 - 2015

2013/14 per week

Retirement pension

Single person

£110.15

Married couple/civil partners

£176.15

State Pension Credit (Single person)

Guaranteed element

£145.40

Savings element

up to £18.06

State Pension Credit(Married couple/civil partners)

Guaranteed element

£222.05

Savings element

up to £22.89

Incapacity benefit (only available for claims made before 27.10.2008)

Short-term (under pension age)

First 28 weeks

£76.45

29 to 52 weeks

£90.50

Short-term (over pension age)

First 28 weeks

£97.25

29 to 52 weeks

£101.35

Long-term (over 52 weeks)

£101.35

Bereavement benefits

Bereavement payment* (lump sum)

£2,000

£2,000

Widowed parent's allowance

£105.95

£108.30

Bereavement allowance (standard rate)

£105.95

£108.30

Child benefit*

First child

£20.30

£20.30

Each subsequent child

£13.40

£13.40

*From 7 January 2013 a charge applies where a claimant or their spouse/civil partner earns over £50,000. The charge is 1% of the benefit received for each £100 that the earnings of the higher earner exceed £50,000.

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